Ted Kennedy and Health Care Reform 1979

NEWSWEEK Washington correspondent John J. Lindsay talked with Sen. Edward Kennedy last week about his new plan for national health insurance and about the broad problems of medical care in the U.S. Some excerpts:

Lindsay: Your critics say that the basic difference between your health plan and President Carter's is that you are free to offer it right now without regard for budget problems—and that you're able to make more out of it politically. Kennedy: The issue is not whether the country can afford health-insurance legislation, but whether we can afford not to have it. Health-care costs are exploding, bankrupting middle-income people, young married couples and (stripping) older retirees of their life's savings. If we do not pass our health-insurance proposal, we are going to end up spending $300 billion by 1983.

With our comprehensive health-insurance plan, the on-budget cost in 1983 is $28.6 billion (more than Federal costs would otherwise be). Four years after the plan is fully implemented, there is a crossover period after which our approach would actually save the consumer and the taxpayer money as compared with doing nothing at all.

The total amounts that will be expended on health care will be less with our proposal than without it, because of the budgetary restraints, the prospective budgeting, the cost controls that are included. I think basically what I'm talking about is freeing the American people from the fear of financial ruin from sickness and illness.

Wouldn't this program increase the demand for health-care services and thus push the cost upward? I think the best evidence is in Canada, the last country that implemented national health insurance and one with which we have shared values and a shared standard of living. In 1968, Canada was spending 6.8 per cent of its gross national product on health care; ten years later, after the passage of national health insurance, it was 7 per cent. We were spending 6.3 per cent of our GNP on health care in 1968 and in 1978 we were up to 8.8 per cent. We'll exceed 9 per cent this year.

But how will you control health costs? What you need in health care, as we have in national defense, education or law enforcement, is prospective budgeting—which means that you allocate so much for health care and you operate within a given budget ... There will not be a proposal before the Congress that has more effective cost controls than the proposal I support.

Five or six years ago you had a bill with a price tag of $77 billion. How is it that you now have a comprehensive bill that costs only $28.6 billion? What we're talking about now is a different approach, building on the private sector through insurance companies and mandating the premiums. The President indicated to us a year and a half ago that he wanted a system built on the private sector, and wanted the money off the budget. We tried to conform and comply with that request.

Did you have any ideological problem with shifting to the private sector? Well, I think that funding the process through a progressive tax system is basically more fair and more equitable than doing it the way we mandated ... but I think we've retained all the essential parts of the (previous) health security act as they relate to the consumers.

The American Medical Association and other professional groups still insist that this kind of program will lead to deterioration of medical care, and the risk of fraud. Quite to the contrary, there will be a very substantial incentive to keep people healthy, rather than treating people when they're sick. And there will be a financial incentive for the elimination of unnecessary surgical procedures. Generally you have ten times as many tonsillectomies on regular medical patients in California as you have on patients in prepaid programs there.

If Sen. Russell Long supports a bill that combines hospital cost containment and a program to cover catastrophic illness, wouldn't that be an irresistible package and an obstruction for your bill? It may. But of course it may go the other way, too, because of the opposition to cost containment and the fact that catastrophic coverage will be very heavily inflationery - because you don't have cost-containment provisions.

Both your approach and President Carter's seem strikingly parallel now—much more similar than one would believe listening to the rhetoric on both sides. Oh, I think the President is sincere in his desire for health insurance. But I don't believe that it can be accomplished (as Carter proposes) in a piecemeal fashion. (With our plan) passage establishes the presumption that the benefits will reach the American people unless there is specific action by Congress to defer them or repeal the legislation. There may be a phasing-in aspect of it, based upon health-care considerations, but not based on the questions of whether there's a strike or OPEC has an embargo or other factors. And in any event, we have changes in the system which are fundamental if we are going to deal with control of costs.

What are the real chances of passing the bill? It's an uphill battle, but I think it's inevitable that we will pass health insurance. It's a challenge.